The Relative Levels and the Character of Institutional Development in Transition Economies

35 Pages Posted: 7 Nov 2002  

Peter Murrell

University of Maryland - Department of Economics

Date Written: September 23, 2002

Abstract

At present, there is no generally accepted accounting of the institutional strengths and weaknesses of the transition economies. The first goal of the paper is to fill this gap by assessing current levels of institutional development. The second is to examine which types of institutional mechanisms make relatively strong contributions. Extensive empirical evidence shows that institutional quality in transition countries is roughly as expected given per capita incomes. Institutions are improving continuously. Given prevailing assumptions that the institutional situation is dismal, the developments giving rise to this surprising finding must be investigated more fully. This investigation begins by cataloging the mechanisms that could have improved institutional indexes. Then, evidence is examined on the relative strengths of each of these mechanisms. Formal institutions have contributed more than informal ones. The largest contributions have come from formal institutions separate from the state administrative structure. Political institutions, legal systems, and independent governmental agencies have been important.

Keywords: Institutions, transition, law, legal systems, administration, social capital

JEL Classification: P5, K0, N4, O57

Suggested Citation

Murrell, Peter, The Relative Levels and the Character of Institutional Development in Transition Economies (September 23, 2002). Available at SSRN: https://ssrn.com/abstract=337082 or http://dx.doi.org/10.2139/ssrn.337082

Peter Murrell (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3476 (Phone)
301-405-3542 (Fax)

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